The U.S. labor market for new graduates of two- and four-year colleges was studied to determine the impact of the large increase in output of graduates that occurred in the 1950s and 1960s. The study was based primarily on published research evidence and available statistical material, supplemented by a small number of interviews with experts in the United States and United Kingdom. It was discovered that, although the economic returns of a college education and growth rate of starting salaries have declined since the early 1970s, the advantages of a college degree remain substantial in terms of relative earnings, higher labor force participation rates, lower unemployment rates, and better access to higher-level occupations. The following were among the study findings identified as being particularly relevant for the United Kingdom: (1) despite the increase in the number of new graduates in the United States, higher education remains greatly valued; (2) employers are attaching increased importance to work experience when recruiting graduates and are looking for a range of personal and core skills in applicants; and (3) the concept of continuing education, whereby education is viewed as a lifelong process, is becoming increasingly prevalent. (Contains 40 tables/figures and 174 references.) (MN)